Intel said it received word in a letter from the FTC's Bureau of Competition that the 3-year investigation had been closed. FTC spokesman Mitch Katz confirmed that the commission has dropped its inquiry, marking the second time in the past decade that the agency has concluded an antitrust investigation of Intel's business conduct without taking action.
"The issues with Intel were complex and the FTC is swamped with mergers and doesn't have the resources to deal with conduct cases," said Garret Rasmussen, a Washington antitrust lawyer with the firm Patton Boggs, who has followed the case. "Add to that, Intel has been very cooperative, unlike Microsoft.
"In a perfect world, the FTC would have brought a conduct case that would have clarified matters in the high-tech world, but their resources are too limited."
Another obstacle to any case against Intel is that its main rivals - Advanced Micro Devices Inc. and Taipei-based Via Technologies Inc. - "are doing quite well," said Mark Gidley, a Washington antitrust lawyer with White & Case. Neither Rasmussen nor Gidley were involved in the FTC probe.
Despite the FTC's decision to drop the investigation, shares of Santa Clara, Calif.-based Intel - the most actively traded U.S. stock yesterday - fell $2.06 to $43.31.
"Investors pushed this FTC case to the back of their minds a long time ago," said Jack Geraghty, an analyst at Gerard Klauer Mattison & Co. who rates Intel a "buy."
"This decision is a nonevent," Geraghty said.
Intel shares, which traded at an all-time high of $75.81 just last month, plunged 22 percent Friday and lost $91 billion in market value after the company said third-quarter sales would trail forecasts because of weaker European demand.
The FTC staff began investigating in September 1997 whether Intel leveraged its dominance in the computer chip market to control markets for other components of personal computers.
Among the practices investigated was whether Intel prevented rivals from producing compatible products by withholding access to its chip technology.
The agency also closed its investigation into Intel's 1998 acquisition of Chips & Technologies Inc. and purchase of an equity stake in Real 3D Inc.
The FTC said in 1998 that it would not sue to block those acquisitions but would keep its files open to review their possible anti-competitive effects on any markets for graphics components or other computer hardware.